Who's exempt from property taxes? You might be surprised

Property tax exemptions aren't anything new. In fact, there are more than 50,000 parcels in Volusia County that didn't pay property taxes in 2012.

By Chris Grahamchris.graham@news-jrnl.com

John Baumeister paid his price.Entrenched deep in the Vietnam peninsula, his company was ambushed at night by North Vietnamese forces. As Baumeister ran for cover, he was hit by shrapnel and he twisted his leg in a culvert. More than 40 years later, he walks with the assistance of a cane and says he has weekly flashbacks to the war.Baumeister and more than 1,600 veterans like him in Volusia County have been coming under fire again — whether they know it or not.As the county and city of Daytona Beach debated last month assessing fees instead of using property taxes to pay for fire protection, proponents supported their argument by saying the system would be fairer if more properties shared the burden.“Only until all have skin in the game is the system fair,” Maureen France, a former DeLand city commissioner and co-founder of Volusia Tax Reform, wrote in a letter to the News-Journal editor in support of fire fees.While no one has singled out wounded veterans in the call for tax reform, a review of property records shows they account for two-thirds of the overall value of the exemptions granted to more than 4,000 homeowners who don't pay property taxes. Veterans account for more than 35 percent of the total number of exemptions as well. The only class of homeowner that accounts for more — nearly 40 percent — are those whose values come to no more than $215 after receiving a homestead exemption. Those property owners — fewer than 2,000 – account for less than 15 percent of the value of exemptions among homeowners who don't pay property taxes.You want skin in the game? Baumeister figures he left his in Vietnam. The 70-year-old, who received a total tax exemption last year on his New Smyrna Beach home valued at $289,810, feels no need to apologize for the benefit approved by voters as an amendment to the Florida constitution.“I was drafted and I didn't have any choice to go to war,” Baumeister said. “Any benefits I get I feel entitled to them.”

Property tax exemptions aren't anything new. In fact, there are more than 50,000 parcels in Volusia County that didn't pay property taxes in 2012, but only a very small percentage of those are what we think of as traditional real estate like Baumeister's home, Volusia County Property Appraiser Morgan Gilreath said. Most are for tangible property, a tax on such things as equipment and furniture that most small businesses don't have to pay, while others are government or institutional buildings like churches, or parcels of negligible value: rights-of-way, ditches, common areas.And of course, all Florida homeowners who live full-time in their houses are eligible to receive up to $25,000 in exemptions toward school taxes, $50,000 for things like county and city taxes.But Florida voters have added several more tax breaks to the constitution in recent years.Exemptions are available to Florida residents who are blind and totally or permanently disabled. Surviving spouses of fallen first responders are eligible for a total property tax exemption as well as honorably discharged service members — or their spouses — with a service-connected permanent disability.“There's a reason these people aren't paying property taxes,” Gilreath said. “It's their constitutional right.”The number qualifying for complete exemptions has grown by nearly one-third since 2006 — 3,185 households paid no taxes back then compared with 4,201 in 2013 (some households qualify for more than one, making the exemption total higher). Flagler County had 606 residential properties that didn't pay property taxes in 2012. But while the number of households is up, the value lost to the county's tax base is not great. Property records show the value of the exemptions is barely more than 1 percent of Volusia's residential tax base. Veterans account for most of that lost value. In Baumeister's case, he could have paid nearly $7,000 in property taxes without exemptions. Others save even more. Jack and Leigh Watson own a home in Port Orange assessed at $670,054 — the most expensive home owned by a disabled veteran, according to county property records. The couple could be saving up to nearly $16,000 in taxes annually. Among Volusia's disabled veterans, 141 homes valued at $200,000 or more are totally tax exempt. The savings are far less — but, arguably, even more important — to those whose homes are valued at or near the minimum $25,000 exemption.Louise Grantham, who lives on Avenue J near Ormond Beach and has been disabled since a vehicle wreck in 2004, already pays fees for stormwater and garbage pickup. Tacking on a fee for fire protection could cut into her daily needs, she said.“I'm already in a bind” with my finances, said Grantham, 67, a former seamstress whose home has an assessed value of $14,600.

Proponents of a fire fee argue that every taxpayer is in a bind.Linda Seaman, who lives with her husband in Orange City, is facing a tax bill of more than $1,800 on the couple's home, which is assessed at $117,000. She hates to think of paying more fees, but it's the only thing she can think of to get everyone to pay their part.“Even if it was a small amount, it would seem to be more fair,” she said.In lobbying for a fire fee, members of Volusia Tax Reform point to the tens of thousands of parcels that generate no tax bill.“The total number of parcels looks so large,” Gilreath said, “but they're not real parcels, not in the way we normally think of.” That doesn't change the fact that more than 4,000 homeowners aren't paying any taxes, and a larger number don't pay any city or county taxes if they are valued below the $50,000 mark. In addition, there are nearly 900 churches and other institutional buildings that are exempted and another 200 commercial or industrial properties.Yet all receive the benefit of fire protection, said France, whose group supports a tiered fee schedule — like the one considered in Daytona Beach — that would allow people in lower-value properties to pay less.“Everyone should have to pay a few dollars,” she said while referencing a parable in the Bible about a widow who gave all she had to the temple. “The service is not free.”Ed Connor, vice president of Volusia Tax Reform, said assessing fees for fire service would help the county lower its overall tax rate — which ranks second among Florida's 67 counties — and help with small business growth.“We have to start spreading out the burden,” Connor said, “so people who haven't been paying property taxes may have to pony up a little. One hundred dollars a year isn't going to put someone in the poor house.”But economists say a fee for fire protection will disproportionately hurt people who already are, in effect, living in the poor house.“The tax burden will be greater for someone who lives modestly than a wealthy millionaire,” said Sean Snaith, director of the University of Central Florida's Institute for Economic Competitiveness.It's not clear whether the idea of a fee for fire service will gain traction. The County Council shelved the idea over concerns that it couldn't withstand a legal challenge. The Daytona Beach City Commission put off a decision for a few months after paying a consultant $25,000 to look into the issue.It's not an easy call, said County Chair Jason Davis, a former sergeant in the U.S. Army who said he thinks about veterans like Baumeister when he weighs the decision of how to lower the tax burden on the county as a whole.“We have to maintain our public safety and a fire fee is a way of subsidizing that through taxpayers,” he said. “I'm looking at the good and looking at the bad and trying to get more information.”

Volusia County Chair Jason Davis is a former sergeant in the U.S. Army and not as initially reported.